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HomeMy WebLinkAbout4-29-2026 HUCMMINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, April 29, 2026 Call to order — 3:00 p.m. President Don Martinez called the meeting to order. Members present: President Don Martinez; Secretary Matt Cheney; Vice President Tom Lambert; Commissioner Kathy Silvernale; Commissioner Jeremy Crosby; GM Jeremy Carter; Attorney Marc Sebora 1. Conflict of Interest 2. Approve Consent Agenda a. Approve Minutes b. Ratify Payment of Bills Motion by Commissioner Cheney, second by Commissioner Lambert to Approve the Consent Agenda. Motion carried unanimously. 3. Approve Financial Statements Mr. Martig presented the Financial Statements. Electric Division net loss increased by $129k over March 2025. Revenues and usage were up but offset by an increase in purchased power, transmission and operating costs. Increase in operating costs included new cylinder heads that were taken out of inventory for Units 6 & 7. PCA brought in an addition $159k for the month of March, there was no PCA for March 2025. Natural Gas Division similar from last year. GM Carter highlighted Electric and Gas customer revenue is increased from last year which relates to the power cost and fuel cost mechanisms. GM Carter reviewed wholesale rates and transmission costs. Large General is carrying classes. Cash and investments were also reviewed. Motion by Commissioner Silvernale, second by Commissioner Crosby to Approve the Financial Statements. Motion carried unanimously. 4. Open Forum 5. Communication a. City Administrator — Matthew Jaunich — Absent b. Divisions i. Dan Lang, Engineering Services Manager — Nothing to Report ii. Dave Hunstad, Electric Transmission/Distribution Manager 1. Construction has started up 2. Inverter on solar field was replaced, which was under warranty 3. Transformer was removed from the hotel building being torn down on Main St. 4. Solar Grant program - Update iii. Mike Gabrielson, Production Manager 1. GE will be onsite the week of May 11 to remove Unit 1 2. Plant 1 cooling tower pipe leak update iv. Byron Bettenhausen, Natural Gas Manager - Absent v. Jared Martig, Financial Manager — 1. Talking with insurance on Plant 1 cooling tower pipe leak c. Human Resources — Angie Radke - i. Compensation Study Update ii. Welder position has been posted d. Legal — Marc Sebora — i. Nothing to report e. General Manager — Jeremy Carter i. Gave update for Byron on projects coming up, MNOPS Audit the week of May 18th and Fairfax Operating Agreement. ii. Continuing to work on cooling tower project, reviewing bid documents and gathering information iii. COS Study update -working through modeling 6. Policies a. Review Policies i. Section 4 of Exempt Handbook ii. Section 4 of Non -Exempt Handbook No changes recommended at this time. 7. Unfinished Business 8. New Business a. Approval of Highland Park Industrial, LLC Natural Gas Transportation and Commodity Purchase Agreement GM Carter presented Approval of Highland Park Industrial, LLC Natural Gas Transportation and Commodity Purchase Agreement. Highland Park currently transports base load and daily swing supplies of natural gas on HUC's transmission and distribution systems. The current agreement in place expires May 1, 2026. GM Carter reviewed the amended changes to the new agreement which include 1) New contract will run for 10 months vs 12 months, which will place both retail transport customers on the same contract cycle for ease of administration, 2) All prepay language pertaining to a 4 cent discount on half the base -load has been removed as the agreement is no longer in place, and 3) The meter price has changed to reflect the last rate increase approved by the commission. Motion by Commissioner Lambert, second by Commissioner Cheney to Approve 2 Highland Park Industrial, LLC Natural Gas Transportation and Commodity Purchase Capacity Agreement. Motion carried unanimously. b. Approval of 1 It Amendments to UFC's Transportation and Commodity Agreements GM Carter presented Approval of 1st Amendments to UFC's Transportation and Commodity Agreements. There are two agreements in place with United Farmers Co-op (UFC), which include the transportation agreement and commodity agreement, and both expire on 10/31/2033. During the duration of the existing contracts, UFC merged with Central Region Cooperative to form Central United Cooperative. As a result of the merger, Central United Cooperative is assigned the rights and obligations under the existing contracts. The 1st amendments to both agreements reflect the amended changes to the agreements and acknowledge the obligations placed upon the newly formed organization. Motion by Commissioner Lambert, second by Commissioner Crosby to Approve 1st Amendments to UFC's Transportation and Commodity Agreements. Motion carried unanimously. c. Approval of 1 Year Extension on Current UNG Transportation Contract GM Carter presented Approval of 1 Year Extension on Current UNG Transportation Contract. HUC has a transportation agreement in place with United Natural Gas (UNG), which the current contract expires on May 31, 2026. UNG is currently in the process of selling its natural gas -related infrastructure. In lieu of renewing a new long-term agreement, per section 3 in the existing agreement, UNG is requesting a 1-year extension of the current agreement until the acquisition is complete. Upon final acquisition of the natural gas assets, new contracts will be put in place with the new buyers of the infrastructure. Motion by Commissioner Silvernale, second by Commissioner Cheney to Approve 1 Year Extension on Current UNG Transportation Contract. Motion carried unanimously. d. Approval of Fairfax Interconnect Agreement GM Carter presented Approval of Fairfax Interconnect Agreement. This agreement has been in place for years, however it was in New Ulm's name since New Ulm was the main agency for Fairfax when the interconnect stations were put in place after HUC built the pipeline. New Ulm has been taken care of New 3 Ulm's Interconnect station and Fairfax's Interconnect station. New Ulm reached out and would like HUC to have a separate agreement with Fairfax. The interconnect agreement establishes the commodity custody transfer point and the interconnection point between Hutchinson's natural gas pipeline facilities and Fairfax's natural gas pipeline facilities. The agreement also spells out the equipment necessary at the interconnection station to transport and read the flow of natural gas at predetermined pressures. Motion by Commissioner Cheney, second by Commissioner Lambert to Approve the Fairfax Interconnect Agreement. Motion carried unanimously. e. Approval of Sterling Energy LLC Contract 1st Amendment. Mr. Gabrielson presented Approval of Sterling Energy LLC Contract 1 st Amendment. The amendment states Sterling Energy agrees to remove Units 3, 4 and 8 from HUC's facility no later than December 31 st, 2026. Any generating set and auxiliary equipment still left on the premise as of December 31 st, 2026 will resort back in rights, title and possession to HUC. Motion by Commissioner Lambert, second by Commissioner Crosby to Approve Sterling Energy LLC Contract 1 st Amendment. Motion carried unanimously. f. Review of 2025 Annual Benchmarking Report Mr. Hunstad presented the 2025 Annual Benchmarking Report. The report this year includes HUC's data in comparison to 121 utilities in the region. The report focuses on distribution system reliability across the country and is customized to each utility that participates in the APPA TRX Reliability. Mr. Hunstad reviewed the SAIDI, SAIFI, and CAIDI Summary along with where HUC ranks to others in the region. Commissioners thanked and congratulated Staff for the hard work. g. Review of 2025 Safety Award of Excellence Mr. Hunstad presented the 2025 Safety Award of Excellence. HUC has earned the Diamond (Top) designation of the American Public Power Association Safety Award of Excellence for safe operating practices in 2025. h. Award Contract for Plant #1 Substation 47MVA Transformer Mr. Lang presented Awarding Contract for Plant #1 Substation 47MVA 4 Transformer. On April 15th, HUC held a bid opening for a 115/13.8kV 47MVA transformer for the Plant #1 Substation 11 RV rebuild project. Four bids were received, of the 4 bids, the lowest bid was disqualified for not providing a performance bond in the amount of 100%, which is required. Staff and DGR Engineering are recommending awarding the contract to Hitachi Energy. If approved, Staff will look into entering into a contract with Hitachi Energy once all documents have been reviewed. Motion by Commissioner Silvernale, second by Commissioner Lambert to Award Contract for Plant #1 Substation 47MVA Transformer. Motion carried unanimously. 9. Adjourn There being no further business, a motion by Commissioner Lambert, second by Commissioner Crosby to adjourn the meeting at 3:38p.m. Motion carried unanimously. Matt Cheney," ecretary ATTEST Don Martinez, Preside!t_.,,.